A satellite image shows an apparent drone strike on an Aramco oil facility in Abqaiq, Saudi Arabia, on September 14 2019. Picture: PLANET LABS INC/HANDOUT VIA REUTERS
A satellite image shows an apparent drone strike on an Aramco oil facility in Abqaiq, Saudi Arabia, on September 14 2019. Picture: PLANET LABS INC/HANDOUT VIA REUTERS

Moscow — There is enough oil in global stockpiles to replace barrels Saudi Arabia has temporary lost due to attacks on its oil facilities, Russia’s energy minister Alexander Novak, an ally of Riyadh in a pact to curb supply, told reporters on Monday.

After the strike on Saudi Arabia’s oil infrastructure, which shut about 5% of global supply, Brent crude posted its biggest intraday percentage gain since the 1991 Gulf War.

Oil producer Saudi Aramco said the attack had cut output by 5.7-million barrels a day.

Asked whether Russia was ready to increase production, Novak said that Saudi Arabia would first give its estimate of the attacks’ consequences.

“But currently, we understand that the world has enough commercial stockpiles to cover the shortage ... in the midterm,” Novak said, adding he planned to have a call with newly appointed Saudi counterpart, Prince Abdulaziz bin Salman.

Novak said that Russia was sticking to its commitments under the global oil production deal and it was premature to talk about any possibly changes to production levels.

Saudi Arabia, the US and China have hundreds of millions of barrels of oil in strategic storage. US President Donald Trump said on Sunday he had authorised a release from the US strategic petroleum reserve.

The International Energy Agency (IEA), which co-ordinates energy policies of industrialised nations, advises all its members to keep the equivalent of 90 days of net oil imports in storage.

Opec secretary-general Mohammed Barkindo has discussed the oil market development with IEA head Fatih Birol, and both have expressed satisfaction that “the situation has been brought under control by the Saudi authorities”, according to an Opec source.

Kremlin spokesperson Dmitry Peskov told reporters separately on Monday that Russia should wait to see how the situation develops before taking any action on production.

According to a Citibank note, Russia has about 295,000 barrels a day of idle oil capacity, with about half of that at top oil producer Rosneft.

Most of the idle capacity “could come online in the course of a few days to a few weeks”, Citi said.

Saudi Arabia and Russia lead a global oil production deal in which Opec and nonOpec nations have agreed to reduce output by 1.2-million barrels a day to help support prices.

Reuters